Ethan Allen Interiors Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Note 17 - Financial Information About the Parent, the Issuer and the Guarantors

Note 17 - Financial Information About the Parent, the Issuer and the Guarantors

6 Months Ended

Dec. 31, 2011

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

(17) Financial Information About the Parent, the Issuer and the Guarantors

On September 27, 2005, Global (the "Issuer") issued $200 million aggregate principal amount of Senior Notes which have been guaranteed on a senior basis by Interiors (the "Parent"), and other wholly owned domestic subsidiaries of the Issuer and the Parent, including Ethan Allen Retail, Inc., Ethan Allen Operations, Inc., Ethan Allen Realty, LLC, Lake Avenue Associates, Inc. and Manor House, Inc. The subsidiary guarantors (other than the Parent) are collectively called the "Guarantors". The guarantees of the Guarantors are unsecured. All of the guarantees are full, unconditional and joint and several and the Issuer and each of the Guarantors are 100% owned by the Parent. Our other subsidiaries which are not guarantors are called the "Non-Guarantors".

The following tables set forth the condensed consolidating balance sheets as of December 31, 2011 and June 30, 2011, the condensed consolidating statements of operations for the three and six months ended December 31, 2011 and 2010, and the condensed consolidating statements of cash flows for the six months ended December 31, 2011 and 2010 of the Parent, the Issuer, the Guarantors and the Non-Guarantors.

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	58,255		$	5,625		$	2,472		$	-		$	66,352
Marketable securities		-		11,016			-			-			-			11,016
Accounts receivable, net		-		13,359			469			-			-			13,828
Inventories		-		-			159,124			4,416			(27,343	)		136,197
Prepaid expenses and other current assets		-		6,275			11,718			2,337			-			20,330
Intercompany receivables		-		808,523			262,217			(13,955	)		(1,056,785	)		-
Total current assets		-		897,428			439,153			(4,730	)		(1,084,128	)		247,723
Property, plant and equipment, net		-		8,380			269,110			13,608			-			291,098
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		15,402			-			-			-			15,402
Other assets		-		2,260			760			-			-			3,020
Investment in affiliated companies		616,411		(99,697	)		-			-			(516,714	)		-
Total assets	$	616,411	$	861,678		$	716,246		$	8,878		$	(1,600,842	)	$	602,371
Liabilities and Shareholders’ Equity
Current liabilities:
Customer deposits	$	-	$	-		$	44,459		$	2,102		$	-		$	46,561
Accounts payable		-		6,420			15,814			218			-			22,452
Accrued expenses and other current liabilities		2,152		43,516			15,127			798			-			61,593
Intercompany payables		323,825		597			727,969			4,394			(1,056,785	)		-
Total current liabilities		325,977		50,533			803,369			7,512			(1,056,785	)		130,606
Long-term debt		-		152,924			-			-			-			152,924
Other long-term liabilities		-		6,253			13,995			92			-			20,340
Deferred income taxes		-		8,067			-			-			-			8,067
Total liabilities		325,977		217,777			817,364			7,604			(1,056,785	)		311,937
Shareholders’ equity		290,434		643,901			(101,118	)		1,274			(544,057	)		290,434
Total liabilities and shareholders’ equity	$	616,411	$	861,678		$	716,246		$	8,878		$	(1,600,842	)	$	602,371

CONDENSED CONSOLIDATING BALANCE SHEET

(In thousands)

June 30, 2011

	Parent		Issuer			Guarantors			Non-Guarantors			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	-	$	69,763		$	7,716		$	1,040		$	-		$	78,519
Marketable securities		-		12,909			-			-			-			12,909
Accounts receivable, net		-		13,609			174			1,253			-			15,036
Inventories		-		-			164,938			4,554			(27,800	)		141,692
Prepaid expenses and other current assets		-		4,598			14,866			908			-			20,372
Intercompany receivables		-		784,285			249,461			(8,423	)		(1,025,323	)		-
Total current assets		-		885,164			437,155			(668	)		(1,053,123	)		268,528
Property, plant and equipment, net		-		8,023			276,057			10,773			-			294,853
Goodwill and other intangible assets		-		37,905			7,223			-			-			45,128
Restricted cash and investments		-		16,391			-			-			-			16,391
Other assets		-		2,700			725			-			-			3,425
Investment in affiliated companies		602,699		(93,132	)		-			-			(509,567	)		-
Total assets	$	602,699	$	857,051		$	721,160		$	10,105		$	(1,562,690	)	$	628,325
Liabilities and Shareholders’ Equity
Current liabilities:
Current maturities of long-term debt	$	-	$	-		$	19		$	-		$	-		$	19
Customer deposits		-		-			59,633			3,016			-			62,649
Accounts payable		-		7,333			19,233			392			-			26,958
Accrued expenses and other current liabilities		2,130		43,212			18,746			902			-			64,990
Intercompany payables		318,882		597			702,748			3,096			(1,025,323	)		-
Total current liabilities		321,012		51,142			800,379			7,406			(1,025,323	)		154,616
Long-term debt		-		164,832			181			-			-			165,013
Other long-term liabilities		-		4,392			14,474			109			-			18,975
Deferred income taxes		-		8,034			-			-			-			8,034
Total liabilities		321,012		228,400			815,034			7,515			(1,025,323	)		346,638
Shareholders’ equity		281,687		628,651			(93,874	)		2,590			(537,367	)		281,687
Total liabilities and shareholders’ equity	$	602,699	$	857,051		$	721,160		$	10,105		$	(1,562,690	)	$	628,325

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)

Three months ended December 31, 2011

	Parent			Issuer			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	-		$	106,087		$	196,556		$	8,533	$	(127,901	)	$	183,275
Cost of sales		-			78,863			130,514			4,503		(128,824	)		85,056
Gross profit		-			27,224			66,042			4,030		923			98,219

Selling, general and administrative expenses		45			10,699			70,117			3,391		-			84,252
Restructuring and impairment charge, (credit) net		-			-			29			-		-			29
Total operating expenses		45			10,699			70,146			3,391		-			84,281
Operating income (loss)		(45	)		16,525			(4,104	)		639		923			13,938

Interest and other miscellaneous income, net		8,122			(3,451	)		89			6		(4,621	)		145
Interest and other related financing costs		-			2,274			-			-		-			2,274
Income before income tax expense		8,077			10,800			(4,015	)		645		(3,698	)		11,809
Income tax expense		-			3,601			124			7		-			3,732

Net income/(loss)	$	8,077		$	7,199		$	(4,139	)	$	638	$	(3,698	)	$	8,077

Three months ended December 31, 2010

	Parent			Issuer			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	-		$	100,980		$	182,505		$	7,899	$	(118,039	)	$	173,345
Cost of sales		-			77,387			121,588			4,271		(119,762	)		83,484
Gross profit		-			23,593			60,917			3,628		1,723			89,861

Selling, general and administrative expenses		45			11,789			64,358			3,135		-			79,327
Restructuring and impairment charge, (credit) net		-			-			59			-		-			59
Total operating expenses		45			11,789			64,417			3,135		-			79,386
Operating income (loss)		(45	)		11,804			(3,500	)		493		1,723			10,475

Interest and other miscellaneous income, net		14,789			(1,916	)		(16	)		-		(11,689	)		1,168
Interest and other related financing costs		-			2,825			77			-		-			2,902
Income before income tax expense		14,744			7,063			(3,593	)		493		(9,966	)		8,741
Income tax expense		-			(6,003	)		-			-		-			(6,003	)

Net income/(loss)	$	14,744		$	13,066		$	(3,593	)	$	493	$	(9,966	)	$	14,744

CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS

(In thousands)

Six months ended December 31, 2011

	Parent			Issuer			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	-		$	222,563		$	391,376		$	17,428	$	(263,171	)	$	368,196
Cost of sales		-			166,387			259,697			9,636		(263,628	)		172,092
Gross profit		-			56,176			131,679			7,792		457			196,104

Selling, general and administrative expenses		90			22,458			139,155			6,836		-			168,539
Restructuring and impairment charge, (credit) net		-			-			(11	)		-		-			(11	)
Total operating expenses		90			22,458			139,144			6,836		-			168,528
Operating income (loss)		(90	)		33,718			(7,465	)		956		457			27,576

Interest and other miscellaneous income, net		14,937			(6,510	)		145			6		(8,373	)		205
Interest and other related financing costs		-			4,625			-			-		-			4,625
Income before income tax expense		14,847			22,583			(7,320	)		962		(7,916	)		23,156
Income tax expense		-			8,103			170			36		-			8,309

Net income/(loss)	$	14,847		$	14,480		$	(7,490	)	$	926	$	(7,916	)	$	14,847

Six months ended December 31, 2010

	Parent			Issuer			Guarantors			Non-Guarantors		Eliminations			Consolidated
Net sales	$	-		$	208,498		$	357,475		$	14,812	$	(242,599	)	$	338,186
Cost of sales		-			159,821			240,150			7,910		(241,937	)		165,944
Gross profit		-			48,677			117,325			6,902		(662	)		172,242

Selling, general and administrative expenses		90			22,051			127,879			6,077		-			156,097
Restructuring and impairment charge, (credit) net		-			-			284			-		-			284
Total operating expenses		90			22,051			128,163			6,077		-			156,381
Operating income (loss)		(90	)		26,626			(10,838	)		825		(662	)		15,861

Interest and other miscellaneous income, net		18,647			(5,841	)		(29	)		5		(8,457	)		4,325
Interest and other related financing costs		-			5,723			153			-		-			5,876
Income before income tax expense		18,557			15,062			(11,020	)		830		(9,119	)		14,310
Income tax expense		-			(4,247	)		-			-		-			(4,247	)

Net income/(loss)	$	18,557		$	19,309		$	(11,020	)	$	830	$	(9,119	)	$	18,557

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
(In thousands)

Six months ended December 31, 2011

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	4,856		$	(1,586	)	$	4,833		$	2,862		$	-	$	10,965
Cash flows from investing activities:
Capital expenditures		-			(1,036	)		(9,224	)		(1,132	)		-		(11,392	)
Proceeds from the disposal of property, plant and equipment		-			68			1,724			-			-		1,792
Change in restricted cash and investments		-			989			-			-			-		989
Purchase of marketable securities		-			(2,108	)		-			-			-		(2,108	)
Proceeds from the sale of marketable securities		-			3,825			-			-			-		3,825
Other		-			258			511			-			-		769
Net cash used in investing activities		-			1,996			(6,989	)		(1,132	)		-		(6,125	)

Cash flows from financing activities:
Payments on long-term debt		-			(11,918	)		(210	)		-			-		(12,128	)
Purchases and other retirements of company stock		(847	)		-			-			-			-		(847	)
Proceeds from issuance of common stock		22			-			-			-			-		22
Proceeds from noncontrolling interest		-			-			275			-			-		275
Dividends paid		(4,031	)		-			-			-			-		(4,031	)
Net cash provided by (used in) financing activities		(4,856	)		(11,918	)		65			-			-		(16,709	)

Effect of exchange rate changes on cash		-			-			-			(298	)		-		(298	)
Net decrease in cash and cash equivalents		-			(11,508	)		(2,091	)		1,432			-		(12,167	)
Cash and cash equivalents – beginning of period		-			69,763			7,716			1,040			-		78,519
Cash and cash equivalents – end of period	$	-		$	58,255		$	5,625		$	2,472		$	-	$	66,352

CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS

(In thousands)
Six months ended December 31, 2010

	Parent			Issuer			Guarantors			Non-Guarantors			Eliminations		Consolidated
Net cash provided by (used in) operating activities	$	8,253		$	(4,790	)	$	(2,135	)	$	1,444		$	-	$	2,772

Cash flows from investing activities:
Capital expenditures		-			(387	)		(2,484	)		(1,286	)		-		(4,157	)
Proceeds from the disposal of property, plant and equipment		-			-			99			-			-		99
Change in restricted cash and investments		-			981			-			-			-		981
Purchase of marketable securities		-			(6,358	)		-			-			-		(6,358	)
Proceeds from the sale of marketable securities		-			1,000			-			-			-		1,000
Other		-			(218	)		-			-			-		(218	)
Net cash used in investing activities		-			(4,982	)		(2,385	)		(1,286	)		-		(8,653	)

Cash flows from financing activities:
Payments on long-term debt		-			(6,633	)		(22	)		-			-		(6,655	)
Purchases and other retirements of company stock		(5,377	)		-			-			-			-		(5,377	)
Dividends paid		(2,876	)		-			-			-			-		(2,876	)
Net cash provided by (used in) financing activities		(8,253	)		(6,633	)		(22	)		-			-		(14,908	)

Effect of exchange rate changes on cash		-			-			-			(32	)		-		(32	)
Net decrease in cash and cash equivalents		-			(16,405	)		(4,542	)		126			-		(20,821	)
Cash and cash equivalents – beginning of period		-			67,269			5,720			863			-		73,852
Cash and cash equivalents – end of period	$	-		$	50,864		$	1,178		$	989		$	-	$	53,031

- Definition

The entire disclosure for condensed financial information, including the financial position, cash flows, and the results of operations of the registrant (parent company) as of the same dates or for the same periods for which audited consolidated financial statements are being presented. Alternatively, the details of this disclosure can be reported by the specific parent company taxonomy elements, indicating the appropriate date and period contexts in an instance document.

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